Antitrust Law Blog : Antitrust Lawyer & Attorney : Sheppard Mullin Law Firm : Antitrust Law Blog

The Ninth Circuit recently affirmed the dismissal of a franchisee's tying and price fixing conspiracy claims against its franchisor, Equilon Enterprises LLC, which does business as Shell Oil Products.  Rick-Mik Enterprises, Inc. v. Equilon Enterprises LLC, __ F.3d __, 2008 WL 2697793 (9^th Cir. July 11, 2008).  The putative class action complaint alleged that Equilon required its franchisees, Shell and Texaco gas stations, to use Equilon to process credit card transactions.  Plaintiff also alleged that Equilon received transaction fees for such processing and received "kickbacks" from unidentified banks that processed the transactions.

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Since the 2003 issuance of the Provisions on the Takeover of Domestic Enterprises by Foreign Investor ("Old Rule"), the Ministry of Commerce ("MOFCOM") has handled more than 500 pre-merger filings.  Among those filings, 85% to 95% of mergers were passed after initial review, while the rest triggered expanded review, and in some cases, hearings.  We are not aware of any announced or disclosed merger being rejected by MOFCOM.

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According to press reports, three agencies and a governing Anti-Monopoly Commission will comprise China's competition enforcement regime when the country's long-awaited Anti-Monopoly Law takes effect on 1 August.  It has been reported that enforcement duties will be split between the Ministry of Commerce, the National Development and Reform Commission and the State Administration for Industry and Commerce.  The regulatory regime would mirror predictions from competition specialists and would incorporate the three governmental bodies that have been most active in training and workshops leading up to the law's enactment. According to press reports, the Commerce Ministry would become home to the country's merger control unit.  The other two agencies would handle behavioral issues, including pricing and non-pricing-related abuse of dominance cases, respectively.  The structure may also be the result of a compromise between the three agencies, as all three were rumored to be jockeying for position during discussions of how to implement the law. Competition specialists say that while the arrangement may end any struggle over which body should enforce the law, the three-tiered structure could also result in delays and uncertainty when developing enforcement standards.

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On July 25, 2008, in a case that presented an issue of first impression in California antitrust law, California’s Court of Appeal of the First Appellate District ruled that the pass-on defense is available to defendants accused of price-fixing.  See Clayworth v. Pfizer, No. A116798, __ Cal.App.4th __, 2008 Cal.App. LEXIS 1151 (7/25/08) (hereafter “Pfizer”).  The case is significant in that, for now, despite the long-standing rule to the contrary in the seminal United States Supreme Court case of Hanover Shoe v. United Shoe Mach. Corp., 392 U.S. 481 (1968) (“Hanover Shoe”), antitrust defendants in California may assert as a defense that an antitrust plaintiff “passed on” any of its alleged damages to its customers.

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